Medicare has fixed costs, but for higher-income households the big swing is IRMAA, the Income-Related Monthly Adjustment Amount. IRMAA is an extra monthly charge for Part B and Part D, based on your tax return from two years earlier, and it applies per person on Medicare.
Revised: 8/17/26
Jason Baar
Fee-Only Medicare Advisor
NPN #2033715
The number Medicare looks at
IRMAA is based on MAGI, or Modified Adjusted Gross Income.
For this purpose, MAGI means your Form 1040 line 11, Adjusted Gross Income, plus tax-exempt interest from line 2a. Tax-exempt municipal bond interest counts. Roth conversion income counts. Capital gains count.
For 2026 Medicare premiums, Social Security looks at your 2024 tax return. For 2027, it looks at your 2025 return. Social Security does the math, reads the IRS return, and mails a determination letter late in the year with the next year’s premium.
That timing matters. You usually cannot prevent a surcharge based on income you already earned two years ago. But if your income has dropped since then, you may be able to appeal forward with Form SSA-44.
IRMAA is a cliff, not a slope
The 2026 figures below come from the CMS-published 2026 Medicare premium tables.
If your joint MAGI is up to $218,000, or your single MAGI is up to $109,000, there is no IRMAA. The standard Part B premium is $202.90/month.
Above that line, the surcharge starts. For someone with both Part B and Part D, the combined monthly IRMAA amounts for 2026 are:
- Joint MAGI $218,001-$274,000, or single MAGI $109,001-$137,000: +$95.70/month, about $1,148/year per person.
- Joint MAGI $274,001-$342,000, or single MAGI $137,001-$171,000: +$240.40/month, about $2,885/year per person.
- Joint MAGI $342,001-$410,000, or single MAGI $171,001-$205,000: +$385.00/month, about $4,620/year per person.
- Joint MAGI $410,001-$749,999, or single MAGI $205,001-$499,999: +$529.60/month, about $6,355/year per person.
- Joint MAGI $750,000 and up, or single MAGI $500,000 and up: +$578.00/month, about $6,936/year per person.
The surcharge is per person, not per household. If both spouses are on Medicare, the household pays it twice. If only one spouse is on Medicare, the household pays it once, even if the income was reported on a joint return.
The cliff is the part people miss. A joint MAGI move from $274,000 to $274,001 adds $144.70/month per person. That is about $1,736/year for one person, or about $3,473 for a couple both on Medicare.
That is why higher-income households often plan Roth conversions, capital gains, and other taxable events around the IRMAA lines.
The fixed Medicare numbers for 2026
Some Medicare costs are not income-based.
The standard Part B premium is $202.90/month. IRMAA stacks on top of that if your income is high enough.
The Part B annual deductible is $283.
The Part A hospital deductible is $1,736 per benefit period. A benefit period is not the same thing as a calendar year. A new benefit period starts after 60 consecutive days without inpatient care, so the deductible can repeat in one year.
The Part D national base premium is $38.99. This number is used for the late-enrollment penalty. Actual Part D plan premiums vary.
The Part D out-of-pocket cap is $2,100/year on covered drugs.
Medicare Advantage plans have a federal in-network out-of-pocket cap of $9,250. Many plans set a lower cap.
CMS publishes new Medicare numbers each November.
The unknown number matters most
Original Medicare alone has no annual out-of-pocket ceiling.
That is the number you cannot look up on a premium table. The 20% coinsurance on most Part B services is uncapped. The Part A deductible can repeat by benefit period. A serious diagnosis can create five- or six-figure calendar-year exposure.
Every Medicare plan structure is an answer to that risk.
Medigap, the private supplement used with Original Medicare, closes much of the gap for a monthly premium. The bad year becomes more knowable.
Medicare Advantage caps in-network out-of-pocket costs at $9,250 or lower. The cap resets every January, and it depends on using the plan’s network.
Original Medicare with Part D only, and no supplement, leaves the highest exposure. Some people can absorb that risk. The problem is not choosing it. The problem is drifting into it without understanding the number.
Neither structure is wrong. They put the risk in different places.
If income dropped, look at SSA-44
SSA-44 is the Social Security form called "Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event."
The current packet, 12-2025 edition, is eight pages, and about half of it is line-by-line instructions. The form itself asks for the event, its date, and your new income estimate.
Social Security lists these qualifying life-changing events: marriage; divorce or annulment; death of a spouse; work stoppage, including retirement; work reduction; loss of income-producing property through no fault of your own, not a market decline; loss of pension income; and employer settlement payment.
Work stoppage is the common one for new retirees.
SSA-44 lets Social Security use a newer, lower income year instead of the two-year-old tax return. Filed proactively with retirement paperwork and a reasoned estimate of the new income, it can reduce IRMAA to match the new income, sometimes to zero. Filed after the year has passed, that year’s tier is usually not recoverable.
The form is free from ssa.gov.
A $0 Part D premium can still have a monthly bill
Part D IRMAA applies even if the Part D plan itself has a $0 premium.
Medicare bills the Part D IRMAA separately from the plan. In 2026, the Part D IRMAA runs from $14.50/month at the first tier to $91.00/month at the top tier.
"$0 premium" does not mean "$0 monthly cost" at higher incomes.
If IRMAA is new to you, there is also a plain-English IRMAA explainer on this site.
This 12-page guide explains IRMAA, the 2026 Medicare cost numbers, the MAGI cliffs, and SSA-44 in plain English. It opens in a new tab, requires no email, and is made to be printed.
Download the free Medicare cost guideYou can also see the full set of guides in the Free Medicare Guides library.